Petral liquidation set to be complete in mid-2016
The liquidation of Pertamina Energi Trading Ltd (Petral) and its subsidiaries, which has been under way since February, is set to be complete by the middle of 2016.
Pertamina finance director Arief Budiman said two of Petral’s entities in Hong Kong, Petral and Zambesi Investment Limited (ZIL) were already in the process of tax clearance from the Hong Kong tax authorities.
“Then the companies will be dissolved,” Arief said at the press conference held in Jakarta on Monday.
Meanwhile, the liquidation of Petral’s subsidiary Pertamina Energy Services Pte Ltd (PES) awaited debt settlement in Singapore, he continued. “The final decision on the debt will involve the State-owned Enterprises Ministry,” he said.
Pertamina president director Dwi Soetjipto said the initial liquidation process was faster than expected.
“After tax clearance from the Hong Kong tax authorities, ZIL and Petral will be dissolved and we expect it to be completed by the middle of this year. As for PES, it must solve its debt problems first, before the liquidation,” Dwi said.
The liquidation of Petral Group was among the recommendations issued by the reform team for the oil and gas sector, led by well-known economist Faisal Basri. The team was formed to study restrictive practices in Pertamina Group’s oil and gas procurement process.
The Energy and Mineral Resources Minister Sudirman Said explained that a so-called “oil mafia” had damaged Indonesia in two ways. First, it led Indonesia to fail to develop and build production facilities. With oil consumption of 1.5 million barrels per day (bpd), Indonesia only produced 800,000 bpd, the rest must be imported.
“It was impossible for oil experts during the 1990s to not predict the increased oil consumption in the future. They were lobbied by the oil mafia not to build new refineries,” he said, adding that the last oil refinery built in Indonesia was the Balongan refinery—built in 1991.
Second, the mafia left Indonesia heavily dependent on fossil fuel and did not develop renewable energy.
Sudirman also stated that Petral Group’s liquidation was necessary as part of an efforts to improve Pertamina’s supply chain management, and to complement the plan to reactivate Integrated Supply Chains (ISC). (ags)